2. At the University of Toronto I talked to a student there and I mentioned seeing the word "loonies" on a video game in a bar nearby. I told her that in America a loony is a lunatic, that the word means that someone is nuts. She said it used to mean that in Canada too, but the meaning changed when the coins were introduced.

I guess it could also mean 'like a loon (the bird)', but what would that be saying?

Mick: Steve's acting a little loony; now he's always talking about this get-rich quick scheme that he brought home from work and how he really wants each of us to have a piece of it. I'm not sure if he's joking or what.

The word "loony" comes from the retarded superstition that staring at the moon will make you batshitcrazy. It can mean one of 2 things:
1)Someone who disagrees with you, and who you do not wish to speak to or listen to. This term can be used by nancy boys and douchebags such as fundies, generally to refer to lib'rals.
2)Someone who is demonstrably delusional or psychotic. Often these people will disguise their psychosis as a political ideology, generally blaming various groups of scapegoats for all their problems based on negligible or nonexistent evidence.